Moody's Investors Service on Dec. 16 upgraded JBS SA's corporate family rating to Ba2 from Ba3 with a stable outlook, citing the Brazilian meatpacker's strong global operations, among other factors.

The rating agency also upgraded the senior unsecured ratings of JBS's wholly owned subsidiaries JBS USA Lux SA and JBS Investments II GmbH to Ba2 from Ba3, and the secured term loan rating under JBS USA Lux SA to Ba1 from Ba2.

Moody's highlighted the reduction in the company's financial leverage and liquidity risk as a result of JBS's stronger operating performance and its successful liability management initiatives between September 2018 and September 2019. The agency said these measures extended the company's debt maturities and reduced funding costs.

The agency also took into account JBS's position as the world's biggest protein producer and its sizeable diversification across protein segments, geographies and markets.

However, Moody's said the company's ratings are constrained by the inherent volatility in the protein industry.

Moody's said JBS's stable outlook reflects the agency's view that the company's operational performance will remain strong, including in the beef segment. JBS's U.S. and Brazilian beef businesses account for about 50% of the company's EBITDA.

The agency said an upgrade to the company's ratings would be subject to its overall earnings stability, its sustained conservative financial policies, and further reduction of risks related to litigations and investigations targeted at JBS's company and controlling shareholders.

A downgrade is likely if the meat processor's operating performance weakens, if its financial policy becomes more aggressive or if its liquidity deteriorates, among other factors.